It is a ‘risk on’ day which boosts currencies.

* ‘Risk On’ boosts currencies.
* BOE meeting…
* Aussie dollar moves higher on jobs.
* Gold and Silver fall on risk reversal…

And Now, Today’s A Pfennig For Your Thoughts.

Good morning and a Tub thumpin’ Thursday to you! You’ll have to take the conn on the tub thumping today as it is an infusion day for me. On top of that we lost power yesterday afternoon and it hasn’t been restored yet. So I’m attempting to get some notes to Chris using my iPad ,which is for the birds! My phone is a hotspot but the IT people have never been able to get it to connect with my laptop so…. Here we are I have a small light at my side as I struggle with the iPad.

Front and center today we have a Bank of England (BOE) meeting today. I fully expect the BOE to cut rates today in response to the BREXIT vote. But pound sterling traders aren’t on board with that call and the currency remains above 1.32 this morning. And this just in – the BOE left rates unchanged in a move that surprised the markets (as well as me). The pound is running higher as the vote was 8-1 to keep rates unchanged. The statement suggests they will again consider an easing in August but doesn’t go into much detail on exactly what kind of policy action they will take. The pound is up about 1.5% following the announcement.

Other than pound sterling the euro is stronger this morning, along with the Aussie dollar (A$). Australia printed their latest employment data last night, and while the total number of jobs missed the target, and the unemployment rate rose, the good news was that full-time jobs beat the expectations ,and that put the A$ on the rally tracks. Not so for the New Zealand dollar / kiwi, the Reserve Bank of NewZealand / RBNZ sent out a message that they will provide an update on their economic assessment on July 21st. And that got the kiwi traders spooked and kiwi took the brunt of that spooking.

The Bank of Canada (BOC) met yesterday, and left rates unchanged, but added a dash of optimism to their statement, and that got the Canadian dollar / loonie on the rally tracks. In fact all of the Petrol Currencies are stronger this morning, led by a huge move in the Russian ruble… I was talking to my fellow members of the managed currency committee the other day, and mentioned that I thought that now would be a great time for Russian President, Putin, to request that the sanctions be dropped by the EU… For the EU has bigger fish to fry right now. If that would happen, and the sanctions were dropped, the ruble has a long way to go to get back to where it was before the conflict with Ukraine began.

Gold is getting sold again this morning in the early morning trading… It’s really obvious that the not for profit sellers are so brazen their moves to reduce the price of Gold… Yesterday we had an awful print here in the U.S. That pretty much signals that there can be no rate hikes any time soon but did that stop the NFP sellers? No it did not! But don’t you worry, they will get their someday….

Speaking of that awful print in the U.S. Yesterday… While the Import Prices data usually goes unnoticed by the markets and media, I’m one that usually takes a quick look at it for any signs of demand, inflation, etc. And yesterday’s quick look at the Import Prices data gave me the willies. June Import prices fell -4.8% year on year or rose 0.2% VS May. These prices leave out petroleum imports, and is cause to be concerned, for it likely is reflecting soft domestic demand. And it’s not all about how strong the dollar is, because the dollar hadn’t been too strong in June. So, soft domestic demand is it, and something the Fed, should be concerned with, for this certainly doesn’t bode well for their call earlier this year that that saw inflation rising this year. As many times as these Fed members have said something in the past that they wished they hadn’t said, (recall the Butler Patio game of name that Bernanke quote?) (or green shoots?) don’t you sometimes think it would be better to just not say anything? I recall when you never heard from a member of the Fed, and would be hard pressed to know any of their names, even the Fed Chairman’s name?

Currencies today 7/14/16. American Style: A$ .7632, kiwi .7189, C$ .7737, euro 1.1132, sterling 1.3342, Swiss $1.022 European Style: rand 14.25, krone 8.3667, SEK 8.4735, forint 281.60, zloty 3.9588, koruna 24.247, RUB 63.1227, yen 105.76, sing 1.3425, HKD 7.7554, INR 66.8488, China 6.6846, pesos 18.259, BRL 3.2338, Dollar Index 95.988, Oil $45.43, 10-year 1.54%, Silver $20.111, Platinum $1,082.30, Palladium $643.70, and Gold $1,323.41.

That’s it for today, I have to get back to sleep for a bit and then onto the infusion center… I hope they have power! I’m going to send this over to Chris who will hopefully be able to get it posted on the blog and sent out to all of you. I hope you have a Tub Thumpin’ Thursday, and Be Good To Yourself!

Chuck Butler
Managing Director
EverBank Global Markets
Editor of A Pfennig For Your Thoughts